ValiRx Regulatory News (VAL)

21 June 2011

ValiRx Plc

("ValiRx" or the "Company")

GeneICE UPDATE

ValiRx Plc (AIM: VAL), a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, is pleased to announce that it has made an important advance in the production method of GeneICE ("Gene inactivation by chromatin engineering") drug candidates. The new technique simplifies the construction of GeneICE molecules and by extension makes them cheaper to produce.

Moreover, the new GeneICE molecule has the potential to deliver better biological activity than observed in the successful trials using earlier molecules. The Board believes that as the new molecule is simpler in design, the remaining pre-clinical studies may be completed more efficiently and quickly than previously anticipated.

The Board believes that the extra cost-saving that comes with the simplification of chemistry and a cleaner biological profile add further value to GeneICE and its attraction to potential licensees and partners. The new enhanced forms of GeneICE drug candidates and control molecules are currently undergoing efficacy and safety studies using model cancer and control systems.

As a result of the cost saving in production of the therapeutic candidate created by ValiRx's new chemistry and the reduction in the cost of other technologies, the grant monies received by Eurostars for the GeneICE development programme are expected to last for a further nine months, enabling ValiRx to conserve its own cash resource, whilst furthering and enhancing its GeneICE development programme.

Dr Satu Vainikka, CEO commented: "This very exciting progress with the GeneICE chemistry offers us a whole range of new opportunities as we explore the potential of these molecules. We anticipate increased interest from potential licensees and partners."

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Notes for Editors

ValiRx Plc

ValiRx Plc is a biopharmaceutical company developing novel technologies and products in oncology therapeutics and diagnostics. The product focus is in the epigenomic analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases.

The Company listed on AIM in October 2006 and is creating a portfolio of innovative products through investment in specific development projects. It actively manages projects within this portfolio as a trading company and is not an investment vehicle. The ValiRx business model spreads the risks of life science technology developments by minimising financial exposure and running a set of projects to defined commercial endpoints. This maximises returns to shareholders by adding value at the earlier stages where value increases per investment unit are the greatest.

The Company operates through the following divisional companies:

·;  ValiMedix is the sales and distribution division of ValiRx

·;  ValiPharma is the therapeutics division with two embedded technologies primarily directed at the treatment of cancers. Of particular note is GeneICE, ValiRx's technology for controlling rebellious genes, which was awarded a Eurostars grant to the value of €1.2 million to fund the development of the GeneICE products through preclinical stages in cancer treatments

Background to GeneICE & Eurostars

In June 2009, ValiRx, as the leading partner of an international consortium of three companies, was awarded a two year grant by Eurostar against substantial competition from across Europe, to develop its GeneICE technology ("GeneICE" or "Gene inactivation by chromatin engineering"), in which "rebellious genes", which cause problems such as cancer and potentially some neurological problems, are shut down or "put on ice".

The Eurostars programme is a EU grant scheme and EUrEKa Network initiative, created with the purpose of providing funding for market-oriented research and development activities by Small and Medium-sized Enterprises within the EU.

ValiRx successfully led the funding application with GenoSyst (Finland) and PentaBase (Denmark) under the 2nd call to the Eurostars joint Programme, for design optimisation, lead selection and pre-clinical testing of GeneICE. The application was rated second in the UK and Finland and first in Denmark, coming in 4th overall out of over 500 applicants within the EU wide scheme.

The technology is under license from Imperial College, University of London and it has been shown to be effective against several cancer cell lines, including prostate cancer, ovarian cancer, pancreatic cancer and lung cancer. ValiRx retains all commercial rights for GeneICE from the programme.

The GeneICE development plan has four principal goals:

1. Identification of specific genomic DNA sequences associated with proven cancer targets.

2. Design and optimisation of the anti-gene system to silence the aberrant genes

3. Evaluation of desired and potential off-target effects

4. Pre-clinical development of an optimised lead therapeutic against a selected target